The wealth of the 25 richest families in the world soared 43% in the last year
bloomberg.com
bloomberg.com
it was actually very cumbersome for me to find people that knew anything else, when I was younger everyone I was around only prided themselves in buying depreciating material things. I’m aware of how pervasive that mentality can be, could be considered a distinct culture.
Situation 1, Year 2: Rich person has 150, the one hundred poor people have 1.2
Situation 2, Year 1: Rich person has 100, the one hundred poor people have 1.
Situation 2, Year 2: Rich person has 150, the one hundred poor people have 0.8
Both situations show increasing wealth inequality, but only one shows wealth redistribution up the ladder.
I personally believe many of these dynasties do have some unfair and systematic advantages, but this article doesn’t have evidence to support that conclusion.
If you don't have money to put into an ETF, you don't have access to it. "Just invest your money" is not a helpful response to people who live paycheck to paycheck.
I wouldn't be surprised if wages in the parts of the global population that's currently industrializing (parts of China and India) went up by way more than 43% though.
One thing I've realized in recent years (thanks to silicon valley stock options): It's not that hard to get into a >99% income bracket for a year or two. You basically just need to participate in an IPO-style windfall, and maybe split it over two tax years. However, staying in that bracket is much harder; you need to have a windfall every year (so, be a successful VC) or be an executive.
For that reason, I'd be interested to see income percentile statistics broken out over a 10 year period vs. annually. Some people summarize this effect with the acronym HENRY (High Earner, Not Rich Yet).
Heh, most of the world would kill just to experience that for one year in their life.
I realize we're on HN, but... calling that not hard feels out of touch. By definition it's extremely rare.
I guess if you mean, an individual who's gotten into that rare position doesn't need to struggle particularly hard to see the fruits, the comment makes sense. Is that it?
I've been an early employee at two startups also, they just didn't pan out.
If I don't get that in one of the more well-paid professions, then I don't see how a teacher, or a janitor, or a waitress, etc, would ever get one.
Yeah I was entirely limiting the population discussed to SWE as well. Anybody who doesn't work in a core tech role has no chance whatsoever of such windfall, and that includes many people who do work in tech roles.
That's been increasingly the experience of friends and coworkers too. I think a fair number of people are either far better off than they think, or just don't see the huge middle class and below squeeze going on.
Or they bought a single-bedroom apartment as a condo for like the same price that most people used to pay for full-size homes back in the day.
And that was all pre-pandemic, when prices were like 70% of what they are now and mortgage rates were super low (that's when I bought mine also). I don't know of anyone who's bought a home my age since then (and I'm an older Millennial, it should be mostly us buying homes right now).
There's a huge Boomer generation also trying to downsize.
Back in 2021 the average homebuyer was 45 years old. This probably hasn't changed that much: https://www.businessinsider.com/typical-us-homebuyer-age-sal...
https://www.nar.realtor/sites/default/files/documents/2021-h...
- GenZ at 2%
- Older Millennials at 23 percent and Younger Millennials at 14 percent of the share of home buyers. Millennials have been the largest share of buyers since the 2014 report
- Buyers 41 to 55 (Gen Xers) consisted of 24 percent of recent home buyers.
- Buyers 56 to 65 consisted of 18 percent of recent buyers and buyers 66 to 74 consisted of 14 percent of recent buyers.
- Buyers 75 to 95 (The Silent Generation) represented the smallest share of buyers at five percent.
Not a unicorn. Just be an early member of a company that gets to IPO. You do have to risk more to attempt that, and maybe do it more than once, but it's a question of appetite for risk and a slightly lower work-life balance. It's definitely not unattainable.
So it's difficult and rare and less/not available to those without safety nets and unhealthy (and, therefore, less/not available to people with disabilities).
I did go ahead and interview at another early startup that reached out last job search and it was such a boring idea (a slight tweak on Blue Apron) and the CTO had such a massive ego (spent literally half the interview talking about all the things he expects from an engineer at the company and how many engineers he's passed on and how people think he's an asshole) I wasn't bothered when he passed on me too. Felt like I was in good company.
Maybe I'll give another one a chance next time I'm looking for a job.
Basically, for a 30 year period, if a grand total of 5% of the populace will earn a top 1% income in their life, you could have 0.5% earning a top 1% income for the majority of their lives (so using up half of the top 1% slots). Another 0.9% earning a top 1% income for an average of 10 years of their lives (using up an additional 30% of the top 1% slots). And in the 30 year period this would leave only 1/5th of the top 1% slots open to the remaining 3.6%, who would have an average of 1.6 years each of being a top 1% income earner. Any spare slots would go to lottery winners.
So, mathematically, the number must lie between 1% and 30% that will be in the top 1% over a 30 year career. The question that remains is where in that range, which gives a measure of economic mobility for a country.
https://taxfoundation.org/data/all/federal/summary-latest-fe...
> Income Split Point $548,336
By the same token, it's not hard for a person to be worth $1M+...steady long-term investment in a 401k over the course of your career can get you there.
But it's _unavailable_ to the average person. They'll get taxed brutally if they touch it, and when managed correctly, will be divvyd out over the course of their retirement...so having 1M doesn't mean it's liquid.
inherited money is not taxable income to the recipient (in the US).
There is a tax on the estate of the decedent if the estate is larger than the exclusion amount.
Not taxable until it is over $12M. The only difference is that I didn't state that it wasn't taxed as income (which it shouldn't be) - it should be taxed as inheritance if it should be taxed at all.
In the context of “an inheritance put me in the top 1% of income”, that’s obviously wrong, which was my point.
We may get two more, not near as sizable as the last one...and if we manage things right, my kids will get some, too.
It doesn't take hardly any money at all if you start early enough. $100 a month becomes $320k at retirement. (yes, handwavey tax implications, but still, 100 a month at 7% for 44 years is $320k)
"The average salary increase in India is likely to be 10% in 2023, up from an actual increase of 9.8% in 2022" [1]
China's was in the range 3.7 percent, with salaries now a double of what they were a decade ago [2].
[1] https://economictimes.indiatimes.com/jobs/mid-career/salarie...
[2] https://www.china-briefing.com/news/average-salaries-in-chin...
I found this mini-documentary by Polymatter[1] interesting. It asserts that Indian firms with ten or more employees are subject to inspections by the Indian labour inspectorate and a bunch of other requirements. For entirely unrelated reasons most Indian firms find 9 to be the optimum number of employees.
I would like to see stats on factory job worker wage growth. No way are they seeing 40% growth!
At the same time, YOY inflation in India is pretty high https://www.statista.com/statistics/271322/inflation-rate-in...
India keeps the majority of the population afloat by big socialist spending - government handouts or there would be riots on the streets!
I would need significantly more than a 43% raise for a single year for my wealth to increase by 43%.
Condos in Delhi regularly sell for half a million dollars and higher.
Meanwhile the government had to extend a free food scheme for 800M people by another 5 years and reduce the price of cooking fuel by 40% because the majority can’t afford to eat.
Even as someone who makes good money, increasingly starting to feel that any semblance of a "good life" is unaffordable here. The discourse among my friends - all well-paid mid-career professionals - was that it's often cheaper to fly out to a country like Thailand and stay in a good resort, than to have a holiday in India.
Wages would tend to be a fraction of wealth for those on middle incomes, say, who have been in work for more than a few years. They will have payed the majority of their wages for years into acquiring a place to live.
In the Uk my house would now cost 8x my wage, a wage increase of 43% (for one year) would increase my net worth by about a sixteenth (~6%).
Inflation is 10% (not 42%) and my employer capped wage maintenance at 8%.
In October, Indian government wage maintenance was 4% (https://www.reuters.com/world/india/india-raises-dearness-al...), do you think the private sector paid 10x more?
How much increase for the net worth minus stocks? Betting that any increase there was much more modest.
It's actually much easier than that: you just have to win the lottery. Easy! I mean, why doesn't everyone do that? Are they stupid?
That's a good point. When people talk about "the 1%" or "the wealthiest families", they take the group that would qualify to be in that ranking today, and compare them with a different group from the past. But they're not the same people. You really need to do a longitudinal study. Take the same people and see how their wealth has grown.
For instance, take the richest person from the 1980s
Yoshiaki Tsutsumi dominated the richest list in the 1980s thanks to his real estate empire. However, times soon changed for Tsutsumi when real estate values tanked in the 1990s and he was caught up in an accounting scandal in the early 2000s. As of 2006, he dropped off the list of the wealthiest people in the world.
Today he's worth 500 million.
To make it that wealthy you generally have to take highly concentrated risks or be extremely leveraged. And this rarely lasts.
https://www.celebritynetworth.com/richest-businessmen/busine...
Do you have any statistics for that claim? In Sweden the largest union negotiated salary increases of 7.4% over two years (https://www.unionen.se/opinion/ja-till-avtal-nu-har-vi-ett-m...) which is far below the rate of inflation. In other words most workers are experiencing pay cuts, not increases. It would be surprising if the situation was completely different in the US.
mostly unheard of?
I'd challenge anyone to show a union winning even a >25% pay raise for their employees, and even those would be unicorns.
The 99th percentile threshold for household income in 2023 was "only" $591,550.
A two-earner couple who sells a house beyond the exclusion amount (or is not eligible for the exclusion) would pretty readily brush into the 99th percentile for that year. (Many zero-earner couples would get there just from a house sale.)
I wouldn't be surprised if a lot of the "one year" 99th percentile folks were there just from a house sale and then someone else takes that spot in subsequent years.
Among the “got into the top 1% once” group, I think it’s possibly a majority of those cases.
Capital gains are roughly “net sales price minus basis”. Whatever the mortgage was has no bearing on it. (Someone who pays down their mortgage aggressively will not have more gains by that action, nor will someone who continually refi’s with cash-out have fewer gains.)
Edit: parent edited their comment to remove a question about how gains are calculated and how that interacted with mortgage payoff.
> Whatever the mortgage was has no bearing on it.
Yeah, I realized that and deleted my edit.
Editing a third time to point out that we're editing back and forth in real time. Your edit on the mortgage didn't exist at the time I deleted my edit about it. :)
Edit: And for those calculating all of this out to determine what percent of the population does fall into the top 1% from a home sale:
https://www.irs.gov/taxtopics/tc701
: If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse.
What an insanely out-of-touch take. HN-ers really are something else.
The richer are getting ever richer, with everyone else stagnating or regressing. Last time inegality was this high gave birth to the concept of a union, to the creation of communism, etc.
If you’re a capitalist who despises progressive ideals, you should be wary right now. The very rich are so rich they’re grabbing all the gains with nothing for anyone else.
There's a difference between wealth and income though. It's entirely possible 10% pay raises yield >43% increases in wealth, so long as most of the original wage wasn't able to go in to savings/investment.
This has got to be the hardest I've laughed at a Hacker News comment. Does dang put funny comments on the highlights section?
A wealth growth of 0->1 is infinite %.
People who are not levered into assets are worse off after an increase in money supply.
Deficit spending necessitates increasing M2, and in turn is a wealth transfer from the poor and middle class to the rich.
Not to mention the banksters who are charging interest on every dollar in existence
Would you be willing to articulate why wealth inequality is bad for society? I am fairly certain that wealth inequality globally is higher than it was in 2000. At the same time, well the poorest globally are doing much much better on average.
In my mindset as long as the median is improving and the poorest are improving, the ratio of rich to poor isn't important and isn't clearing a bad thing if the inequality is increasing. You seem to think otherwise, why?
The issues are broad and subtle with wealth inequality, too much for the scope of an HN comment, but I would posit that inequality issue are about more than access to goods.
I think pointing to wealth inequality as the reason there is increasing disconnection is a stretch. Yes it's a factor but I don't think it's the chief one.
Do you have a pointer to a resource that covers some of the more broad and subtle issues with wealth inequality?
I think it is the chief one. Every time I have seen it suggested that it is some other thing — you don't have to peel but a few layers and find money in fact behind that other thing.
Inequality gives rise to populism and extremism all the way up to civil unrest. If the middle class ignores the woes of poor it is swept by revolution aimed at rich.
With better outcomes for society: labor movement at the turn of century and in 30s.
More recently: Arab spring, Chile 2019
"Although the 18th century was a period of increasing prosperity, the benefits were distributed unevenly across regions and social groups. Those whose income derived from agriculture, rents, interest and trade in goods from France's slave colonies benefited most, while the living standards of wage labourers and farmers on rented land fell."
Same for Arab spring, it's like second sentence on the wiki. It's also heavily about corruption, but guess what, those two go hand in hand. Open maps for corruption and Gini index and you will see strong correlation.
Of course there are more reasons. Society is complex.
If the French revolution wasn't about income inequality then there has never been a conflict about inequality... Read the Rosseau and Voltaire of the period leading up to the crises. You can feel their passion when they talk about inequality.
Here's just one event from the time: https://en.wikipedia.org/wiki/Women%27s_March_on_Versailles
"The rioters had already availed themselves of the stores of the Hôtel de Ville, but they remained unsatisfied: they wanted not just one meal but the assurance that bread would once again be plentiful and cheap. Famine was a real and ever-present dread for the lower strata of the Third Estate, and rumors of an "aristocrats' plot" to starve the poor were rampant and readily believed.[2]"
Not about income equality per se, but you know, not wanting to starve in the streets. Lol what the fuck.
So like I say "inequality" doesn't even enter the broad collective mind. And the intellectuals that try to run "what's next" do talk about "égalité" but again that's not what they mean.
This is not what anyone means by "inequality" now. Not killing the economy with random wars, yes. Welfare, yes. Price controls even, sure. Better planning (because we are talking about famines here in this specific case - not even taxes.) Even when "Egalité" and "Fraternité" make it into foundational texts, soon after, this is not what they are about.
Paywall link Paywall link Makes a slight case but mostly just assumes inequality is bad.
Same story as in plantation times: Make the white servants feel superior to black slaves by virtue of skin color; manipulate poor whites into believing that any perceived gains by blacks had come at their expense.
Although the absolute wealth of poor might have improved since 1900, people can still be angry that someone is extracting disproportionate amount from the system while their situation is stagnating. See flatlined real wages since 1970s
Like many pointed out here, this "43%" was nothing special this year if, for example, you are mid-career and have moderately aggressive stock market participation. It's an example of headline entirely cooked up for agitation.
You are right, it's not the majority of the population. The fine article was trying to raise indignation at the wealth increase of "the 25 richest families in the world", using seemingly gross numbers that they militarized without even noticing that these numbers were completely unremarkable. Or perhaps in bad faith altogether.
Inequality makes possible our current situation, where the owning class encourage and exploit immigrant labour, only to disseminate "news" aimed at making the working class hate those immigrants.
Even if the poor fared a little better we cannot say if they would not have fared even better still had we less of a wealth divide.
Wealth inequality is an issue largely borne out within a particular society.
In the UK we've seen rising poverty and food insecurity at the same time as a rapid increase in the wealth of those at the top. That global poverty has improved means little to someone who is now struggling to put food on their table, or stay on top of their mortgage.
> In my mindset as long as the median is improving and the poorest are improving, the ratio of rich to poor isn't important and isn't clearing a bad thing if the inequality is increasing. You seem to think otherwise, why?
Wealth buys power. Allowing it to concentrate into a small group of people leads to issues.
Social cohesion seems to suffer as inequality rises.
I don't think there is any seems about it. I'm quite confident that social cohesion/solidarity is poorer in the UK now than it was fifty years ago and considerably worse than here in Norway where we have more compressed income and wealth ranges.
My opinion is that inequality destroys people's ability to relate to one another. My worries now are completely different to those I had growing up, and the people who have staff to run their lives increasingly show themselves to have no concept of what life is like for the rest of us.
It feels like there's a fairly dangerous game being played in the UK at the minute, with frustrations around inequality are being exploited and redirected as anger towards out-groups.
The issue is that leaving the EU and attacking immigrants doesn't actually solve the underlying issue. The people behind it still benefit in the meantime but eventually it's going to blow up in someone's face. My sincerest hope is that it's theirs.
I do not have evidence but there are lots of regulations, talking about Spain now, but also in Europe, that leave small players de-facto out by apparently good intentions and make big players almost monopolize markets. Banking system, energy are two examples in Spain but there are lots of small business that get smashed by the fact that by not being profitable enough, causing them economic damage makes them extinguish. Lots of small business have been shutting down in the last few years yet they keep increasing tax rates. Special mention to freelancers, the most mercilessly smashed group here, taking into account that you often cannot control what is coming in the next few months wealth-wise, since that is relatively irregular and self-sustained.
The system is built in harmful ways for most of us.
But making regulations is much easier if you’re very wealthy, so you advocate for regulations that keep you wealthy with a very expensive loud voice and that creates a pretty strong feedback cycle.
One way out (seems to me) is chopping the top off the wealth curve and redistributing - it might matter less that poorer folks are getting money and more that extremely wealthy folks have less insanely disproportionate power to make a world that suits only them.
Deregulation is what allows people to enter markets. Regulation is what puts barriers.
There are plenty of times where regulations are just plain absurd and what they contribute to is to kick out smaller players from the market without any real improvement. It also forces consumers to buy more expensive because the market is more monopolized. Safety is the typical excuse. Sometimes it could make some sense but sometimes is just plain cheating.
I would let people choose carefully and have ALL the information clear (must be really dilligent about this in laws) about what they are buying or not, contracting or not and let the market decide what those levels of quality for each service are and the value they have.
And if we're strictly speaking about the poorest - they also don't have a 401k or retirement savings, so they aren't benefiting from the increase in asset prices.
“Real” meaning “adjusted for inflation”.
https://libertystreeteconomics.newyorkfed.org/2023/01/inflat...
: As there are no official estimates of inflation by demographic and income groups
: In the first post of this series, we present disparities in inflation rates across racial and ethnic groups as well as across income groups between June 2019 and December 2022. We present evidence that during this period, Black, Hispanic, and middle-income households were most affected by rising inflation, experiencing steadily higher price increases relative to the overall average between early 2021 and June 2022. This pattern is largely because a greater share of these groups’ expenditures is devoted to transportation, particularly used cars and motor fuel, categories that led the 2021 inflationary episode. However, over the last five months, as transportation inflation has declined, these gaps have declined as well.
: It is likely the case that the same rate of inflation represents a greater welfare loss for lower-income than higher-income households because of the former’s lower capacity for substituting to less expensive goods, greater liquidity constraints, and larger marginal utility of real income.
That's what inflation adjustment is for.
> The poorest people in the US saw faster inflation-adjusted wage growth than any other income bracket: https://www.epi.org/publication/swa-wages-2022/
It doesn't. "Real wages" are adjusted to changes in CPI. It makes no assertions that everything inflates at the same pace, any more than the overall CPI figure does the same.
If your wages went up 20%, and the CPI went up by 10% (composed of, say, a 40% rise in rent and some commensurate declines in other goods and services), your real wages went up by 10%. Of course, how that impacts actual individuals is different based on their circumstances.
Pray tell, what has declined in price the past 5 years?
https://www.cbsnews.com/amp/news/economy-inflation-deflation...
So is this an actual reduction in price, or yet again just covid supply squeezes easing off? Does a 2.6% drop in price actually offset the price increases of the past 5 years?
Well yes - rent is driven up by more people being around, and groceries by wages and fuel going up. As for fast food jobs - if a fast food job can get you a place to live by yourself that's amazing, but surely that's going to be harder and harder to find as demand stays high and the number of 2-income families, who can just out-bid you easily, also is high.
We have rampant inflation - why would you not expect the NUMBER attached to the stock market to go up?
Do we? I could have sold wheat for $15 per bushel two years ago. Now I'm lucky if I can get $7. It looks more and more like a disinflationary/deflationary environment to me.
CPI continues to show inflation, but the CPI basket measures that which at the end of the supply chain (it is a consumer index, after all), which means that it always lags significantly behind what's going on in the rest of the world.
During the pandemic there were very similar claims about the massive growth in wealth of the top 1%, where the graph conveniently started at the bottom of the 2020 stock market crash. See also: graphs that compare deaths from terrorist attacks vs. other causes, which start in 2002.
I think there's another layer of cherry-picking too, in that the list is the 25 richest families in the world now, so it excludes families whose investments have done poorly. Not sure how much of an effect that has, but entry number one and number five weren't on the list last year and they're both owners of big state oil companies which is a sector that's done unusually well compared to the rest of the economy and to how it was performing a couple of years ago.
You could make an even juicier title I bet if you calculate how much their wealth has increased in the last 5 years.
Vanguard growth fund (VIGAX) 42%
AMZN 71%
APPL 56%
MSFT 55%
GOOG 52%
TSLA 124%
Anyone with an aggressive but not insane portfolio could be at 47% growth in 2023.
The deceptive thing about this "eat the rich" b.s. the media likes to spread is that they make it seem like there is a pie and the rich are eating a lot of it. In reality it's more like there is a cash river and they're drinking a lot but they won't drink any less if more people got in on it. Most USD only exists on paper and most of it is not owned by individuals or considered part of their wealth.
This principle works in many other aspects of life. If google and microsoft want to hire you then so would 1000 other companies. If you can date 10 women ar once 1000 women want you. If you can defeat all your neighboring countries, you can probably give a superpower a very hard time if they invade you.
Little x little = little
Big x big = very very big
To the contrary, inflation and housing-related costs (among many other things) are literally causing us many sleepless hours at night.
I still regret and resent I got taken for a ride with Occupy Wall Street. A naive, young mind I was...
Does not seem similar to today.
I have a lot more life experience now. If I'm going to fester anger against anyone now, it's the media (mainstream, social, et al.) and relevant powers-that-be for taking me on that ride and continuing to try and take me on more.
To put it another way, there's a reason naive, useful idiots like myself were (and are) led to harbor anger against "rich people" and "1%". That reason does not serve to benefit the commons like you and me, nor the so-called "rich"/"1%" people.
You are right back where you started if you'll only admit to it.
I don't understand, you got a degree in finance, learned about OWS, then decided to be a hippie instead of getting any other type of job?
Not finding a job at that time was not a choice for most people who were left out.
Me? A person who actually lives in the property and NEEDS to comply? MY home certainly is a tax burden on me when every single year it's taxable value is reassessed by the county for 20 percent more, requiring immediate and prompt payment before it's lien'd.
Such a joke.
Also in my experience there has been a relatively painless path to challenge the assessment. Although I have never seen an example where the $400 appraisal is worth paying to do so.
Sure, I need to be marked as a deliquent debtor (somehow) for my property to be taken away from me.
And sure, every year, I can pay the department of revenue an appraisal fee to undo the arbitrary decision to increase my tax responsibility.
How about though, we force municipalities and departments of revenues to actually examine the assessment, reassessments, and economic impact? The idea that my home, the land it sits on, an the unconscious value associated with it is worth 40 percent more to other homebuyers is absolutely laughable
Very shortly ,my town will have population 0 with the only commercial land being the giant paper factory owned by a chinese paper congolomerate with a stranglehold over shipping products.
They also cause problems like this because their goal is the appreciation of the assets, not necessarily to live in houses.
Now you'd have to cobble together a group of investors, but if you can't find people who don't understand your vision, you're out of luck.
Or you could go to a bank, so now the banks have more power, but they probably won't invest in your risky idea anyway.
Okay so I guess, now it's up to the government to undertake this large risky project? Great.
I don't know, I like the fact that motivated individuals can take a large amount of their own capital and take on large projects.
2016 Study: A study published in the Journal of the American Medical Association (JAMA) estimated that approximately 133,000 deaths in the US annually are attributable to poverty. 2019 Study: A report by the National Academies of Sciences, Engineering, and Medicine suggested that around 300,000 deaths could be linked to social factors like poverty and lack of access to healthcare. 2020 Report: The Kaiser Family Foundation estimated that roughly 136,000 deaths in 2018 were associated with poverty-related factors like lack of access to healthcare and healthy food.
Your "please think of the rich guys" argument holds no sway with me.
For example, take Jeff Bezos. His income isn't all that much, so you'd probably want to tax his wealth. Luckily, most of his wealth is from a public company, so we can skip the difficulty of valuing it (something a lot of other billionaires would have to deal with).
But now how do you collect the tax? Do you make him sell 95% of his shares of Amazon? That would certainly tank the stock, and then you would owe him a big refund for overtaxing him.
Or does the government just take his Amazon shares? So now the government would be the biggest shareholder of Amazon. Is that good? What does the government do with that stock? Does it start giving shares to government workers instead of paychecks? Does it pay off its debts with Amazon stock? Would the government's vendors even take that as payment?
I agree that wealth inequality is a problem, and we need to do something about it. I'm not exactly sure what or how though.
that's were the solutions need to be implemented
but I find it impossible to have good conversations about this. the last time I was able to discuss this I ended up concluding that somehow euler's constant is basically the same as the gravitational constant but people tell me I'm misscalibrated, so my only retort is I'm mister calibrated....
Why? Wealth isn't zero-sum. Most of the American super-wealthy got that way by providing value to others. I'd argue that the bigger problem to societal stability is jealousy and envy, and the idea that rich people got that way by taking from the poor.
The hugely inflated net worth numbers of the likes of Bezos and Musk are fake anyway, in the sense that their assets could not be converted to that amount of dollars; and the Fed should take a large share of the blame here, because ZIRP made it so that investors could only really put their money in growth tech companies.
Of course it is. We live on a planet with finite resources; everything here is zero-sum. I don't buy the myth that we can create value from nothing. Some people are just better at socializing their harmful byproducts.
Previously we had some lumber worth $10 and now we have a chair worth $250 dollars.
Where did the $240 dollars come from? Was it stolen from somebody else?
All of those factors have hidden externalities baked into them that erode the net value you're creating. My argument is that it's all just a shell game where we're passing costs down the line to future generations while telling ourselves we're creating something valuable from nothing because it's what we need to do to sleep at night. We just don't perceive the longer-term externalities in a lot of cases.
But let's just say that you priced all of the externalities perfectly. In this hypothetical example, can you really make an argument that all of that adds up to more than, say, 100 dollars?
And if you can't, then you still have a lot of "value" to account for.
In an oversimplification, when Peter decides to do business with Paul and Paul is interested in taking his business it's because both believe they'll be better off after that.
Now you could [prematurely] argue that there might be externalities and so on, but you must recognize that that action of trading in itself can be seen as something that is going to increase the overall wealth of both as they'll be more satisfied after the fact (assuming everything goes well).
This isn't even true at a cosmic scale, let alone in human scales. Planet Earth receives exogenous energy from the sun.
You want an example of creating value from nothing? Say your choice this evening was to sit on the couch and do nothing versus charge your neighbor $20 to clean up his yard of fallen leaves. By choosing the latter, you have created $20 of value for your neighbor where none existed before.
> Some people are just better at socializing their harmful byproducts.
This is trivially true, but you make the great leap of equating all wealth creation to an arbitrage in externalities.
I do indeed. I think on a long-enough timeframe, all human activity is just externality arbitrage.
Yes, there are many rich people who are rich directly or indirectly thanks to wealth redistribution: the state is very powerful in taking wealth using force (violence) from the poor and giving it to some wealth people.
But the natural course of how people become wealth is by generating wealth in a way that is positive for everyone!
There's nothing wrong with being wealthy. Poverty is a real problem, and the states are partly responsible for driving people to misery through wars, and the evils of forcing their own fiat currency with inflation and taxation.
Or when netflix raises it's price, they definitely have way more content and more reliable distribution right?
Tell me again how a company making more profit while everyone else suffers is magically not zero sum
Source ? Wealth can and is in many case a zero sum game.
> Most of the American super-wealthy got that way by providing value to others.
Source ? Making money and providing value are not the same thing.
> I'd argue that the bigger problem to societal stability is jealousy and envy
Sure let's not address the problem but instead focusing on the emotion of the people affected. Jealousy and envy are human emotions. They are only a problem for society who fail to adequately provide for their citizen.
> the idea that rich people got that way by taking from the poor.
Every time a someone doesn't pay the adequate amount of taxe, or a company loobies for certain privilege. Where do you think that money come from ?
None of the top 10 richest Americans got to that place via inheritance. Of the next 10, there are heirs of the Walton, Koch, and Mars families, none of whose source of wealth goes back more than two generations. Contrast that to the egalitarian, redistributive European system which allowed the richest families in Florence 700 years ago to still remain the richest families today.
The super-wealthy don't get that way by providing value, they get that way by keeping as much profit from business for themselves and leveraging that money to amass more ways to make money, rinse and repeat. When you look at some of the super-wealthy what you'll find is a pattern of consolidation, wage suppression, bending public policy to benefit themselves, and consumption of public resources.
Consider Walmart. Walmart stores drove small businesses out of towns across the country. The wages paid by Walmart are typically lower than the small businesses they killed. Walmart seeks tax benefits for plopping a store in an area, so doesn't return the same kind of money to the public coffers that the collective small businesses did and the jobs offered are worse and they're harder on suppliers than the small business because of the predatory way Walmart works with suppliers.
Walmart workers are some of the largest consumers of Medicare and SNAP benefits -- because they don't pay enough for people to live on. So the public foots the bill for the difference.
What the American super-wealthy have provided, more often than not, is convenience and temporary lower prices -- not quite the same thing as value. It's easier to do all your shopping at Walmart. It's easier to shop with Amazon. They're cheaper until they've sufficiently snuffed out competition.
Pure Ad Hominem. What is the implication here? You think people are faking their (right or wrong) arguments to cover up jealousy? You think it's not possible to be wronged and envious at the same time? It's not an argument.
Shares are not money, shares are a percentage you own of a company, that's it. It's when you sell said shares and turn it into money that it becomes taxable. It's not rocket science. If you hold the shares forever, that's fine. But as soon as your future son sells them, they get taxed.
I really don't know why everyone always says stuff like that, it's really not a difficult concept. Money is money, stuff that is not money is obviously not money. A house worth 1 million is not equal to 1 million until someone gives you 1 million for it. Before that it's just a pile of wood.
Now this would promote not selling shares, but maybe transferring them. Okay you can't transfer shares.
We just don't try, there is no attempt at anything. If we wanted too, we could.
I am not saying we'll get everything, but even 1% more of what we get right now is worth probably the same tax we collect from all of the poorer tax payers.
I personally don't think we should tax income, I am a proponent of a higher sales tax and zero income tax personally. I think that's easier. You want to buy a jet? Ya you're paying 40% tax, but you get to keep all of your millions.
Why would it tank the stock if the ownership of those shares was transferred from Bezos to a social wealth fund?
Stocks always drop when the biggest holder sells for any reason. People don’t understand the nuance they just see the headline.
When the CEO of Netflix had to sell because his options expired, the stock still dropped because the headline said he sold.
Apropos of anything else, the IRS bases things on the calendar year, and then gives you to April to "settle up". It wouldn't owe him a refund in this situation, then, but his next year tax bill might be lower.
I was assuming such a law would have to have a provision for that.
If you get assessed at 100 billion, start selling off the assets and when you get to 50 billion you have nothing left because of the loss of value, you’d still owe 45 billion? That wouldn’t be fair at all.
AFAIK the high tax rates of the 1950s were also coupled with high levels of deductions/tax loopholes (eg. company cars), so the effective tax rate didn't really change much.
a member of the same democratic society
I don't see a moral justification in the use of force to shackle the capable and the fortunate, forcing them to toil in maintenance of the incapable and the unfortunate. The ideal I'm describing was more or less the case in the US before United States v. Butler (1936), which changed the interpretation of the general welfare clause of the constitution.
What you get with this kind of system is powerful people meddling with the government to reinforce their power using anti-democratic means. A plutocracy. You also have to contend with the toxic economics of monopoly.
I bet you want unregulated utilities too because you a) don't understand macroeconomics and b) subscribe to anti-social and psychopathic economic theories.
This was successful for centuries, but the constitutional protections of this order eventually eroded. Were they stronger and more explicit (say there was no general welfare clause), we could well be living in such a liberal order today.
As the other commenter alluded to, the solution to this is to limit the power of the government so that even if they meddle and gain influence, the harm they can do is limited because the government itself isn't allowed to do whatever it is the plutocrats want to do.
Consider a random thing that you are grateful for, trace down who actually made it possible for you to enjoy, and then consider whether those persons all get equal gratitude.
There are lots of stats that disagree. The overwhelming majority of fortunes are made and squandered within three generations. Raising capable people in an environment of extreme wealth is very hard.
Most famous fortunes are self-made, in the sense that turning a few 100k into billions is something that clearly takes a lot of merit to accomplish. I would also argue that morally, your good fortune in domestic environment (which is the main predictor of economic outcomes) is entirely your own. I don't see a moral claim by a third party over my upbringing as any more valid than a claim over my organs.
people keep saying this but I can't find a rigrous source when I google it, it's always just LinkedIn puff pieces or Quora... would you have a link to the original by any chance?
Most of the companies at this size use a bunch of anti-competitive practices. See the wikipedia list of anti-competitive practices here: https://en.wikipedia.org/wiki/Anti-competitive_practices
So something like microsoft trying to get people to use microsoft-teams and nagging people to set up onedrive for malware protection, is a clear example of market-distortion through anti-competitive practices.
Given that no one gets to be a company this size by playing "fair" then it seems perfectly "fair" to lay claim to that that excess wealth. We assume almost all profit was gathered anti-competitively since in a "fair" market competition forces you to lower your price to the bare minimum.
---
I mean that's mostly bullshit for a lot of reasons, but it seems to me like just as valid a take as the atlas-shrugged "it's my money, keep your government hands off".
Plenty of companies have accomplished the above while playing fair, simply because of the value their products add to their consumers. And once they have added this value, how much they nag you doesn't matter. If you didn't like it, you'd go back to DOS and IRC. The fact that you don't demonstrates my point.
>you've already added tremendous value.
Or you've just filled a niche that already exists in the world, and that could have been filled by someone better, but you're more connected or more ruthless. See also "Multiple discovery" https://en.wikipedia.org/wiki/Multiple_discovery as compared to the "heroic theory" of invention and discovery.
You're not special, sure you might have invented whatever 20 years before someone else, but most great discoveries of big shifts would have been done by someone.
I guess my question is, what if the thing you invented was a better more addictive casino? Sure, you're preying on psychological weaknesses and misleading people, but you're still making money.
Most business lie somewhere in between "more addictive casino" and "genuinely add value to the world". I'd argue the difference between them is where almost all of the profit comes from for most companies.
> but you're more connected or more ruthless
This stuff still counts though. Those are just as valid differentiators in a competitive ecosystem as any others. In fact I'd argue you can't separate them from "merit".
> You're not special, sure you might have invented whatever 20 years before someone else
This seems almost a contradiction in terms. The fact that you got somewhere 20 years before anyone else surely entitles you to the fruits of your success. Or rather, it entitles you more than any other person - what is the basis for your moral claim on the success of another?
> what if the thing you invented was a better more addictive casino?
That still counts. If you agree that we are fundamentally decision-making agents, then it doesn't matter what motivates our decisions. Who are you to decide that a better casino has less merit than a better space ship? What criteria do you use to differentiate "genuine value" from "value"? Why are you so sure these criteria are somehow universal?
Ethics isn't a solved problem, but capitalism definitely isn't an ethics system.
The whole point I'm making is that there is no such thing. People disagree axiomatically. There is no oracle. Ethics isn't just unsolved, it's unsolvable. The closest thing to a universalizable value we have is consent. You say that it's not an ethical system, but you don't say why exactly, and you don't point to an alternative "ethical" system.
> Your logic allows for desperate people to sign themselves into slavery
Not necessarily, it depends on the kinds of contracts that are legally enforceable. I favour monetary penalties only, protected by bankruptcy. The ethics are complicated, but it boils down to how much "present you" is entitled to impose on "future you". In either case, you've not elaborated why exactly that would be "wrong".
> capitalism definitely isn't an ethics system
I agree. Capitalism is a description of the emergent properties of a liberal order. It happens when free people are allowed to interact consensually and resolve disputes via due process. Winners win and losers lose. It's you who is asserting that these emergent properties, which are common to all ecosystems, and totally inescapable wherever living organisms interact, are somehow "wrong".
Who are you to decide how capitalism works? Sure, people disagree axiomatically, but instead of basing everything off a best-effort preference-utilitarianism you've decided to base it off of consent, without accounting for how reality, and especially capitalism, are inherently coercive. Why does consent matter if you can coerse someone into giving it?
Good for those who were smart & lucky enough to have taken advantage of this revolution.
But there was definitely some unhealthy excess & wealth gathering that's gotten very extreme & we can consider if we find this healthy and benificial for society as a whole.
Now, exactly where you draw the line between "rich people earned every penny on their own" and "rich people did nothing and deserve nothing", well, that's politics, along with "who is rich and who is not" and "why do we trust these government chaps to use that money to improve society?".
Before widespread public education, large companies would sponsor the education of the engineers they needed (think locomotives), with contractual obligations to work for the organization for a certain time or repay the cost of education. This is how military college works today, and seems pretty high-functioning.
> exactly where you draw the line
Pretty easy, once you've paid for all the stuff you directly use, the rest is yours free and clear.
1) government was instrumental in the creation of this wealth: you needed the legal system to enforce contracts, the common language taught in schools to communicate with employees, suppliers and consumers, regulators to make sure your suppliers were giving you legit stuff, roads for transport, postal service, etc
2) governement is instrumental in helping you keep this wealth: police forces, general property law enforcement.
edit: if you're very cynical, you can argue that high income tax + welfare is still cheaper than suppressing a violent revolution by poor people.
I take from you what ever I need to ensure those conditions persist.
You are nothing. You are a cog. I am the government, representative of the majority here, not the few lucky ones who won the lottery (that I created.)
I think your perspective on capitalism is grossly unfair.
And who is the arbiter?
The dictation of what should or shouldnt be is power.
I don't think that describes barely enough for the vast majority of people.
You mean that thing that happened when we gifted huge tracts of lands to a few private businesses so they could pay for the railroads? American railroads were NOT a private investment, but a public one!
>airports and airliners
Once again, public money during the war, creating the giant B-29 was more expensive than the Manhattan Project! America absolutely pumped cash into any building that claimed they could put out a few screws a week to support the insane amount of war material building we did. The airliner industry was further supported by Cold War warplane development, with bigger planes and bigger jet engines.
>microchips
Bell telephone had a legal monopoly for several generations. Literal government handout for free extra profit. Further improvements in computing were once again funded by military desires, simulators for planes, early computers were designed nearly entirely for computing ballistic tables for artillery, and selling a little bit of spare time on the side.
Modern America exists because in 1940, America actually invested in itself. None of those investments were private.
More examples: IBM owes a lot of it's early success to mechanizing the US census, once again public money. They even took some money from the Nazis FFS. How much did Henry Ford make building Shermans and other war material, often for the british or soviets to use? Starlink's Dishy terminal wouldn't exist without shitloads of public funds put into new phase array solid state scanned radars that were built out for the aegis system.
Or how about basically the entire country's infrastructure exists because the feds spent billions on paying poor people to dig ditches so they wouldn't starve to death. I'm sure walmart and amazon would do great with our old state roads right?
But sure, let's keep pretending these were "bets" by "private" companies.
Do huge tracts of land magically become working railroads? The word "happened" is carrying a lot of weight here.
In general, your argument handwaves the difference between basic research (often paid for by public grants to universities) and a working implementation subject to market forces. The two have radically different incentive structures and require very different competencies.
Good things don't happen by a politician's fiat, no matter how many tax dollars you throw at the problem. Behind every story of "America actually investing in itself" is men and women toiling away, breaking backs and burning midnight oil, almost always out of a profit motive.
The companies were gifted not just land for the railroads, but 100ft of land on both sides of the rail line, as well as bonus land grants for every mile of "grade" totaling about 6,400 acres (2,600 ha) for each mile of railroad built, because the desire was for the railroad companies to fund the construction by selling the land. We also gave them significant bonds at 6%, which were repaid in full and with interest. The money was free and didn't exactly have strings attached. Gifting land to private individuals or companies used to be America's favored way to set up the next generation of wealth. In total, the acts to build the transcontinental railroad gifted the private companies more land than the state of Texas covers.
The labor to build said railroads was then imported from Ireland and China. These same laborers were then treated as outsiders and "anti-american". The people who "burned the midnight oil" to build the cross country railroads were not americans working for a profit motive, but immigrants purposely encouraged to come to america with a false promise of "opportunity" so that they would be stuck here with limited opportunities outside of working for the railroad under shit conditions that often resulted in deaths, and underpaid with funds from the sale of land that was gifted to the companies by the federal government.
This was as clear cut a handout to build infrastructure as you can get, and then we let these same companies pretty much explicitly become robber barons. We paid for their capital costs and then let them eat the profits from said capital. The same acts giving railroads money also made provisions to build a cross country telegraph line, so there's some handout to future communications infrastructure.
In other words, a profit motive on the part of those immigrants. They desired to make their lives better. That the opportunities were false doesn't mean they were not being sought out.
> This was as clear cut a handout to build infrastructure as you can get, and then we let these same companies pretty much explicitly become robber barons.
I agree the grants had inadequate oversight and because of that, it's fair to call it a handout. But again, just because land and money were handed out does not mean that you get a working railroad on the other side, or that public funding is the only way to get large infrastructure works done.
Were some of the risks subsidized by the public in the case of the transcontinental railroad? Sure. The same thing happened with Solyndra, and nothing of value was produced at the end of that. So clearly government handouts aren't the necessary and sufficient precursor to success; at least the transcontinental railroad was built.
And mind you, back in those days, US government spending as a percentage of GDP was in the single-digit percent, compared to the behemoth it is now at over 35%. If the redistribution of public money through taxation really generated wealth, we should all be living like kings given current levels of government spending.
> Gifting land to private individuals or companies used to be America's favored way to set up the next generation of wealth.
None of the descendants of the railroad tycoons are still so rich that they're worth being written about[0]. Cornelius Vanderbilt was estimated to have been worth 1/87th of the US GDP at the time of his death. His famous heir, Anderson Cooper, is estimated at the upper end to be worth $200M. In contrast, even the poorest state in the union, Mississippi, has had a billionaire from playing music, of all things[1].
[0]: https://www.forbes.com/sites/kerryadolan/2020/12/17/billion-...
For example, I was listening to a discussion on how Bill Gate's philanthropic organization causes many problems. They've basically taken over the field of malaria research by virtue of spending a ridiculous amount of money, and Gate's personal influence has limited the directions of that research. There are people in Africa that are trying to tell the Gates foundation to leave because their solutions are poorly suited to the on the ground situation, but the neo-colonial nature of this organization means you have many "smart" people in Washington and Geneva dictating how the global poor should run things. The influence of the organization has on public education apparently been disastrous, with the charity reorganizing public schools in ways that are unproven and harmful to students. The foundation is a revolving door for corporate actors like pharmaceutical employees, and they take and use public tax dollars in ways that are unaccountable to the public. All of this is because one man has more money than god. It's anti-democratic and ineffective.
If Bill Gates wasn't allowed to have so much money, I assume the government would have taken it at truly confiscatory tax rates. Then you have the same problem of meddlesome "aid" to Africa, except that the entity writing the check would be the US government, not Bill Gates.
A democratically accountable entity is very much preferable.
Her portfolio is both as narrow and as broad as you'd expect from someone with extreme family wealth -- with huge stakes in Amway likely worth billions paying millions of dollars/year in distributions and then just all matter of other stuff; the Orlando Magic basketball team, car dealerships, fitness clubs, real estate developments, international resorts, that Boxed Water company, distilleries, closet system manufacturers, pharma manufacturers, auto suppliers.
https://www.citizensforethics.org/wp-content/uploads/2021/03...
So basically they can make their wealth anything they want by controlling the price of the stock.
It would be the same thing as me asking my friend to invest $1 in my business, giving them 1 share out of 10 billion shares, and then claiming my net worth was 10 billion dollars.
Or selling one share for £50, be richer than Elon Musk, and then get accused of fraud
Indicators that the economy is extremely bad right now include the current state of the job market and that Toys for Tots is seeing a massive decline in donations along with a simultaneous increase in need for toy donations[0]. That's not something that would be happening if we had 5% growth and 0% inflation like the president claims[1], at least if that looks remotely like it did back in the 1980s and 1990s during the Reagan and Clinton booms when the American economy was actually booming for everybody.
[0]: https://www.nbcphiladelphia.com/news/local/our-bins-are-empt...
Zoom out far enough, use aggregate data, and avoid details, and you can make property on the moon as sexy a beachfront property in Miami.
As a percent of population, number of Americans with multiple jobs is well south of where it was from 1994-2009.
If anything I’d expect the rise of side hustle platforms, all electronic payments and the ease of getting into it to lower the number of uncounted side hustles.
It takes 30 seconds search to turn up:
Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over
1982-84 CPI Adjusted Dollars, Seasonally Adjusted
https://fred.stlouisfed.org/series/LES1252881600Q
The source above is deflated by CPI, and shows that earnings has been flat compared to pre-pandemic levels. Not great, but not terrible either. Some other sources point out that if you use the PCE deflator instead, earnings are actually up modestly (3% since 2019).
https://www.economist.com/finance-and-economics/2023/11/30/r...
Ownership of a house is one of the major milestones of life. If many people are being prevented from achieving it, they are going to say things are bad.
Someone who could only afford to purchase the cheapest essentials experienced a much larger increase in their living costs than the CPI would indicate. Yet it's still used, despite how misleading it is.
2. The CPI might not be perfect, but it's still better than a vague handwavy argument backed by zero statistics.
1. The wealthy don't typically look to increase their wages, mainly because it's much harder to dodge tax on them.
2. Only if the only statistic you look at is how much wages have increased in the last year, ignoring all of the other statistics like rent, rising food/energy insecurity, a decrease in retail volume yet increased revenue, etc.
> 2. The CPI might not be perfect, but it's still better than a vague handwavy argument backed by zero statistics.
Who said anything about being handwavy or lacking statistics? We have freely available data on how many people are using food banks, how much energy prices and rent have risen, on the much greater rise in the cost of supermarket own brand goods as compared to branded goods, etc.
We know for a fact that people are spending more and buying less. I'm not sure it takes a genius to understand that the people who were already struggling are going to suffer a much greater drop in their quality of life than the class whose main gripe is how "sad" it made them to raise their rents or lay off employees.
The wage data in question[1] divides population by quartiles. This isn't comparing some minimum wage worker to jeff bezos.
[1] https://www.atlantafed.org/chcs/wage-growth-tracker
>2. Only if the only statistic you look at is how much wages have increased in the last year, ignoring all of the other statistics like rent
Instead of cherry picking a specific CPI component, why not look at the entire CPI?
> rising food/energy insecurity
source?
> a decrease in retail volume yet increased revenue, etc.
Maybe that's because the covid stimulus/savings bonanza has stopped?
>Who said anything about being handwavy or lacking statistics? We have freely available data on how many people are using food banks, how much energy prices and rent have risen, on the much greater rise in the cost of supermarket own brand goods as compared to branded goods, etc.
Present them, then.
*This* naive disconnect is part of the problem.
Also, you're presuming the source is trusted. When your gut feels like you're struggling, anyone who tells you otherwise isn't going to be met with trust and an open mind.
I'm not sure what the point you're trying to make is. Is it that if you take any number and multiply it by 300 million, you'll get a big number? Is it that the average american is so dumb and/or lazy that they need to have the news spoonfed to them by corporate media?
>While our "leaders" are feeding us "look all the sunshine" while we choke down a stack of bills and get slapped by inflation every trip to the supermarket.
We just established that inflation isn't eroding wages. I'm not even going to address the generic comment about bills.
>Also, you're presuming the source is trusted. When your gut feels like you're struggling, anyone who tells you otherwise isn't going to be met with trust and an open mind.
If you're going to reject government statistics and not entertain logical arguments because "your gut feels like you're struggling" or whatever, then it's clear that we're in conversation bizzaroland where anything goes and the only thing that matters is your feelings.
Fwiw, I heard more than one news segment on the econony this past week. Each time it was the talking head and some "expert". Each time it was "the numbers are great, why isn't the public on board?" You know how you answer that...you ask the public. The fact that they don't and instead they force feed a narrative...that's a red flag.
It's easy to reduce unemployment if you also cut back on welfare while CoL increases, forcing people to take whatever shit jobs they can find just to not become homeless, and voila now you have record low unemployment.
Fast food, too expensive. Think about that for a moment.
This is incorrect for most Americans and in most American zip codes [1].
Those rank-and-file workers have suffered less than their bosses. For all private sector workers, including managers and executives, weekly earnings averaged 3.1% more but could buy 3.0% less.
2022: With an overall increase of 4.7%. But with inflation at 7%, the average person lost ground in terms of real income. This was particularly true for the middle half of earners who saw a median wage increase of only about 2.5%.
The picture was a bit better for low-wage earners, but not enough to shift the broader pattern for 2021: Inflation outpaced wage increases.
2023: Inflation roared back to the highest level in over 40 years, then slowed markedly. In all, consumer prices are up nearly 15.7%. Gasoline is up 51.2%.
Raw wages, unadjusted for inflation, have risen every quarter of Biden’s presidency, and generally at higher rates than wages rose under his predecessor, Donald Trump.
But once you adjust for inflation, many of these gains disappear. Real wages — that is, inflation-adjusted wages — fell or were unchanged during the first six quarters of Biden’s presidency.
Source? BLS data[1] shows that CPI-adjusted wages are marginally up compared to pre-pandemic levels. There was a spike during the pandemic and current levels are down compared to that, but that's an issue with data collection rather than workers getting magically getting pay hikes during the pandemic. Specifically the lockdowns hit retail and hospitality workers the hardest. Those jobs also tend to pay low, so if those people aren't employed, the average goes up.
Wondering if living in my car in the bay area would be better than living in an apartment in Iowa.
The cost of living in Iowa is in the top 5 lowest cost of living states in the entire country. You could probably find a 900sq ft apartment with underground, heated parking in Iowa for the cost of your apartment in the bay area.
I haven't found remote work willing to deal with that yet.
You could have a 2000 sq ft apartment in Iowa for the cost of a 500sqft bay area apartment
This in turn has massive downstream effects for how close people can live to work, how much money is spent on gas or maintenance and general earnings.
There's also the rising cost of food, the gutting and destruction of local businesses (see: Bartell's Drugs) and so forth.
As far as Philly's Toys for Tots being down this year, you'd really need data on more cities and charities to actually support your point that things are extremely bad, no?
No, it wouldn’t, because median wages are up higher than median local inflation. In most zip codes, and for most Americans, real earnings are up.
The problem is we feel nominal cost increases as inflation and nominal wage increases as personal achievements. (Real wages are also lower than pandemic levels after accounting for stimulus, which creates a basis problem.)
[1] https://fred.stlouisfed.org/series/LES1252881600Q - 3/362
In the context of reporting talking about benefits to the super rich, I actually can't tell if this claim about the 99% is intended to be literal or hyperbole. But the Michigan consumer sentiment and expectation numbers and process seem to indicate that it's certainly not such an overwhelming majority who are worse off and expect to get worse off.
Both ICS and ICE are up from this time last year, even if they're below their longer-run averages. And the inputs of these are variables that are based off of favorable% - unfavorable% for survey questions. http://www.sca.isr.umich.edu/
What I also don't understand is that official statistics show maybe a ~20% homeless population increase in the last decade, and still a long term trend of big drops. Yet there are obviously 10-100x as many homeless as there were a decade ago in Northern California. It's so obvious that the statistics cannot possibly be even remotely correct... I've been living here and seen it happen first hand.
That is the problem with average statistics that do not show the change in distribution.
Another thing that confounds people is that they are comparing themselves to a certain socioeconomic class not well represented in the data.
For example, if you are on this forum, you are probably in the socioeconomic class that works for well funded businesses, and own equity in the public markets, and even more so, equity in the most profitable portions of the public equity markets.
That means if you are competing for goods and services (including land) with people who have those characteristics, then your perceived rate of inflation is going to be very different than someone who is competing with people in different socioeconomic classes.
For example, a lifestyle that involves eating avocados regularly, flying at least a few times per year, and most importantly, buying land in a region where other people in the top 10% or 20% are also competing to buy land.
Sleeping rough is what you seem to be most sensitive to, but a lot of homelessness is crashing on friends’ couches and sleeping in cars.
For many, this is to a significant degree due to the high price of housing and education (whether paying for your children's education or paying off your own educational debt). All of this is in a context where median real wages haven't increased in 50 years:
https://sgp.fas.org/crs/misc/R45090.pdf
> Indicators that the economy is extremely bad right now include the current state of the job market
The current state of the job market is that 199k jobs were added in November and the unemployment rate came down to 3.7%:
https://www.bls.gov/news.release/empsit.nr0.htm
> That's not something that would be happening if we had 5% growth and 0% inflation like the president claims
Note the clarification on the tweet that 0% it is referring to the PCE - the monthly change in inflation, not the latest inflation rate, which is 3.24%. Nonetheless it's very clumsy wording by POTUS.
> at least if that looks remotely like it did back in the 1980s and 1990s during the Reagan and Clinton booms when the American economy was actually booming for everybody.
That claim isn't supported by the historical data.
https://eprints.lse.ac.uk/59386/1/blogs.lse.ac.uk-Rising_inc...
Note that family inequality grew under both Reagan and Clinton. The article posits that this was due to Reagan's anti-union activity and Clinton's financial deregulation.
That's exactly the issue though. Nobody has seen an economy like this. Economists who spend their whole careers trying to understand and document how economies evolve aren't trying to pull one over on you, they just aren't sure themselves what's going on.
People are falling over themselves to declare a recession, even though they themselves are not acting like they're in a recession: https://iop.harvard.edu/youth-poll/46th-edition-fall-2023
>4. Young Americans have a favorable view of their personal financial situation. At the same time, a substantial majority hold a negative perception of America's economy.
Is the economy bad anyway? Who knows! Maybe it depends on whether you want it to be. That Biden tweet and the Community Notes on it are a perfect distillation of how to pick your own narrative:
>Inflation was 0% last month – and our economy grew by more than 5% last quarter.
To me, this is crystal clear: prices on average didn't rise during the month of November and GDP rose by 5% during Q3.
The community notes, meanwhile, is written as though Biden should have said "inflation was 3% during November" and to say otherwise is so misleading that he might as well be lying:
>Tweet is referring to the PCE index, % change from the preceding month. Inflation is normally assessed annually (12 months) however, & the Fed’s PCE goal is 2%. It is currently 3%
All of these numbers are totally accurate. Biden wasn't lying, the Community Notes aren't misrepresenting anything either. There's no contradiction at all, but so many people appear to be left with the impression that deception is happening and Biden got caught.
I am not an economist, but it seems to me that if someone has to think for more than a moment about what "0% inflation in November" could refer to in this context (presumably because they are so incredibly attuned to expecting the "normally assessed" annual number) then I don't think they understand the concept of inflation at all.
If we're catering to people like that then frankly the sky is the limit for giving them whatever impression they want in whatever direction they already want to be led. The same person could also just be confused the exact other way by using the annual number, and assume that "3% inflation in November" means that "prices rose by 3% in November." The same person could think that "inflation" won't be over until prices "go down", so until we have a massive recession and deflation these permanently "high" prices will forever prove that Biden "never got inflation under control".
Maybe that's fine if you're just want to be mad at [current president] but if you want to get closer to the truth or make decisions based on the economic environment as it actually exists then rather than work backwards from the conclusion that the economy is bad, it's probably better to pay attention to both your lived experience and what experts are saying, live in that tension rather than reach for conspiratorial thinking, and withhold judgment until absolutely necessary.
I'm more worried about the people making (net worth increasing) $100 million per year, 1351 times the average income, or as much as an entire town. Or $2 billion per year, which would take twenty seven thousand years for someone to earn at a median wage.
If you're earning as much every year as the average person earns in 27000 years of working, perhaps we should raise taxes on that a bit and not allow reduced-rate capital gains and tax-free loans.
I agree that capital gains should be taxed more - its strange how income (work) is taxed higher than money sitting in accounts, doing nothing.
> income (work) is taxed higher than money sitting in accounts, doing nothing
It's not money just sitting in accounts. It's just the paper value of the stock that Pichai or whoever owns, which ultimately is a fractional share of Google the company, which presumably is engaging in productive enterprise[0]. And stock grants are taxed; you definitely can't dodge the tax man that easily.
[0]: Now, you could definitely argue that the value that Google provides to the world is less than what its market capitalization would indicate, and I certainly have a sympathetic view to that. But it's individual market participants that decide what that value is.
"When inequality gets too extreme, then it becomes useless for growth, and it can even become bad because it tends to lead to high perpetuation of inequality over time and low mobility."
-Thomas Piketty
It’s measured in fiat money *at a given point in history.